Luis A. Alejo, California Assemblymember (Democrat, 28th district – Salinas), is proposing big changes to Assembly Bill 2100. The bill, which is a Bill of Rights for both professional boxers & Mixed Martial Arts fighters, currently is laid out as the following according to this AB 2100 fact sheet.

AB 2100 authorizes the State Athletic Commission to revoke or refuse to renew the license of any mixed martial arts (MMA) promoter in California that participates in coercive and unfair contracting practices. This bill also extends the scope of the Boxers’ Pension Plan to include professional MMA fighters licensed in California.

Purpose

The purpose of the bill is to prevent the mistreatment of MMA fighters in California by banning certain exploitative contracting practices that violate athletes’ freedom to work and their ability to support their families. Many California MMA fighters have retired after suffering multiple concussions, bone fractures, muscle tears, nerve damage and spine injuries, which threaten their ability to earn a living and support their families as they grow older. AB 2100 enables MMA fighters to benefit from the pension fund that has been available to boxers in the state since 1981.

Background

Mixed martial arts, also known as MMA, is one of the fastest growing sports in the world. Many of the most talented and well-known professional fighters in the sport live in California and are licensed to compete in events held in this state. Since 2006, California has hosted more than 60 professional MMA events, making California a center of the mixed-martial arts world.

Fighters licensed in California who compete in these contests often undergo years of demanding training, and risk serious injury. Despite these physical risks, California MMA fighters have no pension benefits and limited protection against exploitation. Promoters often require that MMA fighters in California agree to coercive and oppressive contract terms that can include exclusivity clauses, unlimited merchandise rights agreements and legal waivers among other things.

This bill will protect professional MMA fighters from unethical business practices and would extend legal protection currently afforded to professional boxers by the Boxers’ Pension Plan and the Muhammad Ali Boxing Reform Act of 2000.

Now that you’ve seen the fact sheet for AB 2100, you have a sense of what the legislation is about. However, this week new changes were proposed by Assemblyman Alejo to AB 2100 that would change the landscape in a significant way. The proposed changes could give California MMA fighters a significant boost in terms of contractual rights and would take away some legitimate power from the major player(s) in MMA.

Let’s just say that Zuffa (UFC) will not be very happy about the proposed contractual changes. The proposed changes in this bill could spark a legal battle given that UFC contracts establish jurisdiction in Las Vegas, so how would a Zuffa fighter based in California be able to legally challenge the terms of the Zuffa contracts?

An act to amend Sections 18849, 18880, 18881, 18882, 18884, and 18887 of, and to add Section 18649 to, the Business and Professions Code, relating to athletes, and making an appropriation therefor.

AB 2100, as amended, Alejo. Athletes: mixed martial arts fighters.

Existing law, the State Athletic Commission Act, creates the State Athletic Commission and makes it responsible for licensing and regulating boxing, kickboxing, and martial arts matches and wrestling exhibitions. Existing law prohibits a promoter from having a proprietary interest in a boxer or mixed martial arts fighter without the approval of the commission. Existing law creates the continuously appropriated Boxers’ Pension Fund and requires the commission to establish a pension plan for boxers and to deposit the moneys collected by the pension plan into the fund.

This bill would require a promoter to provide specified written and sworn statements regarding his or her financial interests to the commission before the promoter can receive compensation from a boxing or mixed martial arts contest. By requiring a statement to be made under penalty of perjury, the bill would expand that crime and would thereby impose a state-mandated local program. The bill would also require the commission to revoke or refuse to renew the license of a mixed martial arts promoter who enters into a coercive contract, as defined, with a mixed martial arts fighter, who has been convicted of a felony or a gross misdemeanor, or who has been subject to specified law enforcement actions, investigations, or allegations. This bill would require the commission to establish a professional code of conduct for licensees. This bill would also extend the scope of the Boxers’ Pension Plan to include professional mixed martial arts fighters and would
rename the fund as the Boxers’ and Mixed Martial Arts Fighters’ Pension Fund. By providing for new moneys to be deposited in a continuously appropriated fund, the bill would make an appropriation.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

SECTION 1. Section 18649 is added to the Business and Professions Code, to read:

18649. (a) The commission shall revoke or refuse to renew the license of any mixed martial arts promoter that enters into a contract with a mixed martial arts fighter in the state of California if the contract contains one or more coercive provisions. A contract provision shall be considered coercive to the extent that it does any of the following:

(1) Assigns any future merchandising rights to a promoter beyond the term of the promotional contract.

(2) Automatically renews the contract or extends the term without good faith, arms-length negotiation.

(3) Grants the promoter a right to match the terms of a competing offer or contract.

(4) Grants the promoter a right to enter into exclusive negotiations with a mixed martial arts fighter.

(6) Requires a mixed martial arts fighter to relinquish any legal claims for negligence that the fighter has, or may acquire in the future, against the promoter.

(7) Restricts a mixed martial arts fighter from contracting with another promoter.

(8) Requires a mixed martial arts fighter to forfeit any rights as a condition precedent to the fighter’s participation in a contest.

(b) The commission shall revoke or refuse to renew the license of any promoter if it finds that the promoter, or any person or entity that is a partner, agent, employee, stockholder, or associate of the promoter, has been convicted of a felony or a misdemeanor involving moral turpitude in any jurisdiction; is currently the subject of a state or federal criminal investigation; has been subject to a state or federal tax lien within the past five years; has failed to respond to a subpoena issued by any government agency; has been found to have violated any local, state, or federal law; has been sanctioned by a local, state, or federal judge; or has been credibly alleged to have violated international human rights standards.

(c) To ensure that individuals and entities licensed under this act observe common standards of decency, the commission shall, in consultation with the Association of Boxing Commissioners, establish a professional code of ethical conduct. Notwithstanding any other provision of this code, the commission shall enforce the code of ethical conduct.

SEC. 2. Section 18849 of the Business and Professions Code is amended to read:

18849. No promoter, nor any person having a proprietary interest in the promoter, shall have, either directly or indirectly, any proprietary interest in a boxer or martial arts fighter competing on the premises owned, leased, or rented by the promoter without written approval from the commission. No promoter shall be entitled to receive any compensation directly or indirectly in connection with a contest until the promoter provides to the commission the following:

(a) A copy of any agreement in writing to which the promoter is a party with any professional athlete or contestant licensed under this act.

(b) A statement made under penalty of perjury that there are no other agreements, written or oral, between the promoter and the athlete with respect to that contest.

(c) All fees, charges, and expenses that will be assessed by or through the promoter on the athlete participating in the event, including any portion of the athlete’s purse that the promoter will receive.

(d) Any reduction in the athlete’s purse contrary to a previous agreement between the promoter and the athlete.

SEC. 3. Section 18880 of the Business and Professions Code is amended to read:

18880. (a) The Legislature finds and declares all of the following:

(1) That professional athletes licensed under this chapter, as a group, for many reasons, do not retain their earnings, and are often injured or destitute, or both, and unable to take proper care of themselves, whether financially or otherwise, and that the enactment of this article is to serve a public purpose by making provisions for a needy group to insure a modicum of financial security for professional athletes.

(2) Athletes licensed under this chapter may suffer extraordinary disabilities in the normal course of their trade. These may include acute and chronic traumatic brain injuries, resulting from multiple concussions as well as from repeated exposure to a large number of subconcussive punches, eye injuries, including retinal tears, holes, and detachments, and other neurological impairments.

(3) The pension plan of the commission is part of the state’s health and safety regulatory scheme, designed to protect boxers and mixed martial arts fighters licensed under this chapter from the health-related hazards of their trade. The pension plan addresses those health and safety needs, recognizing the disability and health maintenance expenses those needs may require.

(4) The regulatory system of California is interrelated with the conduct of the trade in every jurisdiction. Athletes licensed under this chapter participate in contests in other states and many athletes who are based in those other jurisdictions may participate in California on a single-event basis.

(5) The outcomes and natures of fights in other jurisdictions are relevant to California regulatory jurisdiction and are routinely monitored for health and safety reasons, so that, for example, a knockout of an athlete licensed under this chapter in another jurisdiction is paid appropriate heed with respect to establishing a waiting period before that athlete may commence fighting in California.

(6) The monitoring of other jurisdictions is an integral part of the health and safety of California athletes licensed under this chapter due to the interstate nature of the trade, and therefore the regulatory scheme for contests and athletes under this chapter should reflect this accordingly.

(7) Some mixed martial arts promoters licensed under this chapter engage in certain exploitative, oppressive, and coercive contractual practices that violate athletes’ freedom to work and their ability to support themselves and their families as professional athletes.

(8) It is necessary and appropriate to establish standards to protect the rights and welfare of mixed martial arts fighters licensed under this chapter from unscrupulous promoters and coercive contractual practices.

(b) The provisions of this article pertain only to professional boxers and mixed martial arts fighters licensed under this chapter.

SEC. 4. Section 18881 of the Business and Professions Code is amended to read:

18881. (a) The commission shall, consistent with the purposes of this article, establish a pension plan for professional boxers and professional mixed martial arts fighters who engage in boxing or mixed martial arts contests in this state.

(b) The commission shall, consistent with the purposes of this article, establish the method by which the pension plan will be financed, including those who shall contribute to the financing of the pension plan. The method of financing the pension plan may include, but is not limited to, assessments on tickets and contributions by boxers, mixed martial arts fighters, managers, promoters, or any one or more of these persons, in an amount sufficient to finance the pension plan. Any promoter that receives a fee for televising a boxing or mixed martial arts contest performed in the State of California on a pay-per-view or network telecast shall pay 5 percent of the gross receipts from the telecast, exclusive of federal, state, or local taxes, into the Boxers’ and Mixed Martial Arts Fighters’ Pension Fund. For purposes of this section, the term “sufficient” means that the annual contributions shall be calculated to achieve no less than the average level of annual aggregate pension plan contributions from all sources for the period from July 1, 1981, through December 31, 1994, and adjusted thereafter to reflect changes in the Consumer Price Index for California as set forth by the Bureau of Labor Statistics.

(c) Any pension plan established by the commission shall be actuarially sound.

SEC. 5. Section 18882 of the Business and Professions Code is amended to read:

18882. (a) At the time of payment of the fee required by Section 18824, a promoter shall pay to the commission all amounts scheduled for contribution to the pension plan. If the commission, in its discretion, requires pursuant to Section 18881, that contributions to the pension plan be made by the boxer or mixed martial arts fighter and his or her manager, those contributions shall be made at the time and in the manner prescribed by the commission.

(b) The Boxers’ Pension Fund is hereby continued in existence and renamed as the Boxers’ and Mixed Marital Arts Fighters’ Pension Fund. All contributions to finance the pension plan shall be deposited in the State Treasury and credited to the Boxers’ and Mixed Martial Arts Fighters’ Pension Fund. Notwithstanding the provisions of Section 13340 of the Government Code, all moneys in the Boxers’ and Mixed Martial Arts Fighters’ Pension Fund are hereby continuously appropriated to be used exclusively for the purposes and administration of the pension plan.

(c) The Boxers’ and Mixed Martial Arts Fighters’ Pension Fund is a retirement fund, and no moneys within it shall be deposited or transferred to the General Fund.

(d) The commission has exclusive control of all funds in the Boxers’ and Mixed Martial Arts Fighters’ Pension Fund. No transfer or disbursement in any amount from this fund shall be made except upon the authorization of the commission and for the purpose and administration of the pension plan.

(e) Except as otherwise provided in this subdivision, the commission or its designee shall invest the money contained in the Boxers’ and Mixed Martial Arts Fighters’ Pension Fund according to the same standard of care as provided in Section 16040 of the Probate Code. The commission has exclusive control over the investment of all moneys in the Boxers’ and Mixed Martial Arts Fighters’ Pension Fund. Except as otherwise prohibited or restricted by law, the commission may invest the moneys in the fund through the purchase, holding, or sale of any investment, financial instrument, or financial transaction that the commission in its informed opinion determines is prudent.

(f) The administrative costs associated with investing, managing, and distributing the Boxers’ and Mixed Martial Arts Fighters’ Pension Fund shall be limited to no more than 20 percent of the average annual contribution made to the fund in the previous two years, not including any investment income derived from the corpus of the fund. Diligence shall be exercised by administrators in order to lower the fund’s expense ratio as far below 20 percent as feasible and appropriate. The commission shall report to the Joint Committee on Boards, Commissions, and Consumer Protection on the impact of this provision during the next regularly scheduled sunset review after January 1, 2007.

SEC. 6. Section 18884 of the Business and Professions Code is amended to read:

18884. (a) A promoter may, but is not required to, add to the price of each ticket sold for a professional boxing or professional mixed martial arts contest, an amount specifically designated on the ticket for contribution as a donation, either or both, to the pension plan established pursuant to Section 18881. The additional amount shall not be subject to the admissions tax required by Section 18824 or any other deductions. Nothing in this section shall authorize the addition of such amounts to less than all the tickets sold for the professional boxing or professional mixed martial arts contest involved. The promoter shall pay additional contributions collected in accordance with Section 18881.

(b) Any additional contributions received pursuant to this section shall not be considered to offset any of the contributions required by the commission under Section 18881.

SEC. 7. Section 18887 of the Business and Professions Code is amended to read:

18887. In addition to any other form in which retirement benefits may be distributed under the pension plan, the commission may, in its discretion, award to a covered boxer or a covered mixed martial arts fighter, a medical early retirement benefit in the amount contained in the covered boxer’s or covered mixed martial arts fighter’s pension plan account at the time the commission makes this award and in the manner provided in the regulations governing the boxers’ and mixed martial arts fighters’ pension plan. This benefit shall be in lieu of a pension.

SEC. 8. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.

1. I seriously doubt this is aimed at Zuffa. I suspect the target is shady local promoters who don’t pay their fighters, don’t arrange for qualified medical personnel to be on site, and other typical scumbag promoter stuff.

2. Regardless of who it is aimed at, I seriously doubt it passes.

3. Even if it does pass, Zuffa would simply stop holding shows in California. The only organization this will hurt is CSAC, which will feel the financial pinch when Zuffa stops filling arenas in California.

4. If it does pass, local MMA in California will be decimated, much like Hawaii nearly killed off their local MMA scene when they passed legislation that crippled smaller promoters.

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“The commission shall revoke or refuse to renew the license of any promoter if it finds that the promoter, or any person or entity that is a partner, agent, employee, stockholder, or associate of the promoter, has been convicted of a felony or a misdemeanor involving moral turpitude in any jurisdiction”

This clause alone wipes out about 50% of the local MMA promotions out there. The MMA business is chock full of ex cons.

“No promoter, nor any person having a proprietary interest in the promoter, shall have, either directly or indirectly, any proprietary interest in a boxer or martial arts fighter competing on the premises owned, leased, or rented by the promoter”

… and there goes the other 50% of local MMA shows. Promoters doubling as managers (and vice versa) is pretty damn common in local MMA (Monte Cox being the preeminent example).

“Any promoter that receives a fee for televising a boxing or mixed martial arts contest performed in the State of California on a pay-per-view or network telecast shall pay 5 percent of the gross receipts from the telecast”

LOL

This is exactly the same kind of thing that got Oklahoma sued and Hawaii shunned by major MMA promoters. It’s nothing more than a bureaucratic money grab and it always has the opposite effect of what was intended. They think the 5% tax is going to fill their coffers, but in reality it empties them because no one will hold televised shows in California. They never see the 5% and they end up losing their usual fees because the number of shows decreases.

I support this legislation, and believe it is highly beneficial to the athletes who make the sport great. I urge everyone to fax letters in support of this bill (they are hoping to receive by Friday, April 13).

Any letters of support for Assembly Bill 2100 should be faxed by Friday, April 13th to both Assemblymember Luis Alejo, and Assemblymember Nora Campos, chair of the Assembly committee hearing the bill.

Of course you support this Rob, You have an agenda slanted towards anything that takes the power away from UFC and puts into the hands of people such as yourself. This does nothing for the fighters. This piece of Legislation will lead MMA down the same road boxing took. The road that made boxing the headache that it is today. Do MMA fighters need protection, pensions, and benefits? Sure. But that is a logistical nightmare that not even NFL or any of the big 4 sports had to deal with in their early days. Change will come. It takes time to build to that level. Rome wasn’t built in a day and neither was the NFL.

Difference is, NFL is a corporation with a bottom line and a history of stepping over it’s competitors, just like what the UFC has had to do over the last 10 years.

Rob, just stop. You lost man. I was behind you when you first came up with your MMAFA idea, as I’m sure a lot of other fans did as well. But you over reached and got greedy. You had a totally different approach at first, one that didn’t involve headhunting the UFC. You are no different that Millen, Pavia, O’Reilly and every other tool with an overinflated sense of self worth that thinks You can do better, that You know better than the one organization that has actually done something right. The one organization that made the hard decisions to build a foundation. A foundation that has slowly but surely made our little game into a legitimate sport. One that has sustainability. Having fighters under one roof hasn’t been the black specter of death that you and so many others have claimed for so long. Fighters wouldn’t keep coming back, wouldn’t make this their careers if UFC was as devious or as harmful to the athlete or the sport itself that you claim it to be, if that was case. I say people of your ilk are more harmful, dissension wise, than just about anything else, other than the TRT/PED issue. But you keep banging that drum, that death rattle, that death march, that agenda you so loudly proclaim is the answer to all these problems you say is killing our sport. We’ll keep enjoying what the UFC brings to the table.

Forget about the UFC. This doesn’t affect them one iota. They’ll just stop traveling to California. They have already ‘boycotted’ California once (from September 2007 to October 2009), there is nothing to stop them from doing it again.

Who this does affect is the dozens of little promoters that run shows throughout California. They will feel the financial pinch of increased fees and increased scrutiny on how they run their businesses, while the big boys go play in another sandbox. This legislation will make California a much less attractive place for entrepreneurs to get into the MMA business, and a much more difficult place for those already in the business to make a profit.

“I support this legislation, and believe it is highly beneficial to the athletes”

I strongly disagree.

I agree that it is well-meaning, but if this bill is passed it will end up driving smaller promoters either out of business or out of California (or onto reservations). IMO, this legislation will decimate the local/regional MMA scene in California. The extra fees for the pension fund alone will drive a lot of entrepreneurs out of the sanctioned California MMA business. The only promoters who can afford the additional financial burden are those with TV/PPV revenue, and they will shun California in order to avoid the 5% tax on their broadcast fees.

If this passes, I predict we will see a gigantic decrease in the number of sanctioned MMA events held in California. No matter how you slice it, less opportunities is not good for the athletes.

This assumes that all commissions will follow the lowest common denominator–I do not agree.

As to increased expenses, the local promoters are not drawing PPV fees–in fact, a single MMA promoter is drawing such PPVs, and given the risk and injury, is it to much to ask for contribution to a pension?

ALL other commissions should follow California’s lead–not vice versa. This is where Steve and I disagree.

The legislative agenda (supported by the big promotions) has already driven many of the local/regional promoters out of the arena–this was not by accident. If you need proof of this–look at the promotion of shows in California from 2007 to 2011 for proof. This legislation has nothing to do with that trend at all–but that trend was fully intended. . .

“This assumes that all commissions will follow the lowest common denominator–I do not agree. “

I’m not sure what you mean here. What other commissions are you referring to? I am just talking about CSAC.

“As to increased expenses, the local promoters are not drawing PPV fees–in fact, a single MMA promoter is drawing such PPVs, and given the risk and injury, is it to much to ask for contribution to a pension? “

1. That fee is only a part of their proposed financing for the pension fund. They also mention assessments on tickets and ‘contributions’ by fighters/promoters/managers.

2. It is not a PPV fee. It is a broadcast fee, meaning they get 5% of any broadcast income, not just PPV. That widens the field considerably.

3. The promoter who makes the vast majority of the broadcast/PPV income in the industry (Zuffa/Forza), will likely bypass California if this passes. California will likely never collect a dime in broadcast fees from the only promoter who makes any real money, and in the process they will also lose the fees multi-million dollar gates that Zuffa/Forza brings to California.

That’s all well and good, but let’s be realistic, that won’t happen anytime soon. National legislation might get the job done, but doing it state-by-state is just going to result in Zuffa/Forza cherry-picking the locations for their shows to minimize SAC fees.

“The legislative agenda (supported by the big promotions) has already driven many of the local/regional promoters out of the arena”

I can’t speak towards what is happening in California, but here in Ohio the local MMA scene is booming. Seems like there is a local show every weekend withing a 100 miles or so of where I live. Whatever ‘legislative agenda’ the big promoters have pushed must not have reached us.

In regards to California, I wonder if CAMO has anything to do with decrease in number of shows. Amateur MMA is the cash cow of most local promoters (sad but true). I wonder if the increased fees instituted by CAMO have dried up that revenue stream in California.

I overreached and got greedy. How so, exactly? I am extremely curious, given that I have never profited a dime off a fighter in all the time I have been involved in this sport. Not once.

Very interesting too that you concede that MMA fighters deserve the same protection as boxers, but yet, continue to bash this bill. I am curious as well as to what your justification is.

Want a fast and easy way to increase compensation to the athletes? Require all compensation to be disclosed–just as in boxing. Require ALL contracts to be disclosed–just as in boxing. Boxers get pensions? Why shouldn’t MMA fighters?

Notice in the written article I say all revenue sources–Dan Diaz just made public that he believes the UFC owns at least 11% of TapOut and as much as 20%, and this also includes other brands as well. . . .

Nice posts Steve–I see and understand your point, and also believe some of these issues will be worked through in the legislative process. I believe it is a mistake to not support the bill because the bill isn’t perfect.

In California–the amount of shows has substantially declined over the past 3-4 years, and CAMO may in fact have something to do with that. Other regulations are also invovled, and again, I do not believe these regulations are accidental at all (and are in fact supported by the major promoters).

My biggest concern with the bill is that it will turn California into what Hawaii has become … a former hotbed of MMA that has been completely abandoned, both by local promoters (due to increased admin costs and gate fees) and national ones (due to broadcast fees). A bill that was intended to be a boon for the Hawaiian MMA scene ended up killing it instead.

Almost none of the money has been distributed to fighters in the 30 years since the fund was created. They are claiming they “can’t find” eligible recipients. Call me crazy, but shouldn’t they be tracking that sort of thing?

Despite being established over 30 years ago and paying out almost none of their principle, the pension fund only has a balance of $4.74MM. They also mention that it has only increased by about $100M since 2007.

What the heck is the point of a pension fund that (1) doesn’t pay out to eligible athletes and (2) doesn’t grow it’s principal? Do we really want them running another fund when their boxing fund has been an abysmal failure?

This bill will destroy both high level and local MMA in California. No way will Zuffa and Bellator set foot in the state if this passes (if Zuffa doesn’t sue first) and the extra taxes will kill off local shows.

[...] we have a similar situation where another fighter’s bill of rights has been introduced in California as well (hmm, any connection there you think?) and it has just as many unrealistic provisions as [...]

[...] Alejo. Three years ago, Alejo was pushing Assembly Bill 2100 in California. AB 2100 would have allowed MMA fighters to tap into the Boxer’s Pension Fund and would have subjected promoters to regulations regarding adhesive/coercive contracts. AB 2100 [...]